For three months now, Kenyans interested in buying a used car have been forced to cough up 30 percent more than the usual retail price.
It will now cost you 30 percent more to buy a used car
A used Toyota Vitz now costs Sh1.2million
The rise in prices have been attributed to three factors; weak Kenyan shilling against the dollar, increase in shipping costs as well as shortage of vehicle supply. At the time of publishing one U.S. dollar is worth Sh117.99.
Read: Kenya shilling continues to lose value against the U.S dollar as Tanzania and Uganda currency rise | Pulselive Kenya
These three factors have contributed to a Toyota Vitz for example. hitting the Sh1.2million mark in a majority of car bazaars, while some sell it for up to Sh1.3million.
“The weakened shilling has hit the sector and now a Vitz that previously you could get for a Sh1 million is now costing Sh250,000 more,” Charles Munyori, the secretary-general of the Kenya Auto Bazaar Association said.
Another example is an increase in prices for 2015 editions of Toyota Harrier, Fielder and Premio as well as Nissan Sylphy. According to Munyori, bazaars have been forced to increase prices to between Sh150,000 and Sh400,000.
Shortage of semiconductor chips
The increase in prices can also be attributed to shortage of semiconductor chips. Towards the end of 2020, a shortage of the chips hit the globe. The shortage has now extended to 2022 with car manufacturers being one of the most affected.
Semiconductors are very vital to the car manufacturing business as they are used for various functions, from power management to sensing, displays, vehicle control and safety features.
The shortage led to; "Ford missing out on an estimated 1.25 million sales last year. Volkswagen fell short of planned production by 1.15 million, GM and Toyota missed out on 1.1 million and Stellantis came up short by about 1 million units," stated CNET.
Read: Price of used cars in Kenya set to shoot up in the wake of coronavirus pandemic | Pulselive Kenya
Munyori in his closing remarks, warned Kenyans to brave for tougher times as he doesn't foresee a reduction of prices anytime soon. “Kenyans should not expect prices to come down anytime soon unless a miracle happens because we are in for a hard time,” he told Business Daily.
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